Commentary on the economic , geopolitical and simply fascinating things going on. Served occasionally with a side of snark.

Tuesday, December 31, 2013

December 31, 2013 Oddity - why does some trader think an unusual tail risk bet involving 9800 S&P January weekly puts ( which expire in ten days ) is a good play ? Someone know something , someone heard something...... just a hedge of some exotic type ? Something to ponder , guess we see what happens , if anything , in ten days !

An unusual and strongly bearish position is apparently looking for the S&P 500 to plummet by the end of next week.

optionMONSTER's Depth Charge system shows that a trader bought 9,800 January Weekly 1475 puts that expire in 10 days, for the ask price of $0.20. These are new positions, as the previous open interest at that strike was just 263 contracts.

The puts have a delta of less than 0.01, suggesting a probability of less than 1 percent that they will expire in the money. These contracts are too far out of the money to be hedges, so this is an odd "tail risk" trade. (See our Education section)

The S&P 500 Index is up another 4 points to yet another new high of 1845.39. It was last below 1475 last January.

So , what could the trader be looking at ? Maybe ObamaCare disaster going off the rails ?

Report: Only half of new ObamaCare enrollees in 17 states have paid first month of premiums

POSTED AT 11:31 AM ON DECEMBER 31, 2013 BY ALLAHPUNDIT

No way to know yet if the federal exchange is also seeing a 50 percent payment rate system-wide, but if it is, we’re looking at close to 500,000 people whose new coverage will begin tomorrow in some sort of limbo. Or maybe more, actually: At least one insurance company is seeing payment rates closer to 35 percent, and the Journal found one man who signed up in late November who still hasn’t been billed yet by his new insurer. That’s the fruit of chaos imposed on the industry by Obama and HHS in moving around deadlines haphazardly to protect themselves politically. They moved the sign-up deadline back nine days, to Christmas Eve, and then they “suggested” that the payment deadline be moved back to January 10th, all but forcing insurers to cover people retroactively. Expect a new “suggestion” for them to move the payment deadline back further into January, as some insurers have already done, if that 500,000 can’t get their acts together in time to pony up the 10th.

How chaotic is it right now? One insurance exec predicts that people will be bringing printouts from the exchange websites to the doctor in lieu of insurance cards because the industry simply can’t meet the logistical demands created by the White House to send everyone their card in time.

Normally, insurers require payment for coverage before the coverage begins. They count an enrollment as complete only when the first month’s premium has been received from a customer. As of Monday, however, only about half of enrollees billed for plans offered by more than 100 insurers in 17 states had paid their first month’s premium, said Mark Waterstraat, chief strategy officer at Benaissance, a third-party billing firm that works for those insurers…

After the federal government extended the deadline to sign up for coverage from Dec. 15 to Christmas Eve, most insurers in turn extended their deadlines for payment, some as late as Jan. 10 for coverage starting Jan. 1. Some, like Independence Blue Cross, a Philadelphia-area insurer, pushed the deadline as far back as Jan. 28. Humana Inc. said Monday that it would accept payments as late as Jan. 31.

Independence Blue Cross is pre-emptively sending insurance cards to consumers before they have paid, said Brian Lobley, a senior vice president. The insurer dispatched 20 workers over the weekend to create the plastic membership cards and ship them to presumptive enrollees. The plans won’t be “active” until the new customers actually pay Independence, but mailing the cards early will allow them to start using their plans right away once they have paid, Mr. Lobley said.

I’m guessing HHS will announce this weekend, while the media’s still in its holiday slumber, that they’re “suggesting” insurers follow Humana’s lead and extend their own payment deadlines from the 10th to the 31st. That’s the beauty of these White House “fixes”: There’s no limit to them, really, because insurers are in no position to resist even if what Obama wants doesn’t technically carry the force of law. HHS already threatened to exclude companies that don’t comply with its every ass-covering whim from the exchanges next year, a potentially terrible financial blow given how many millions more consumers will have been forced onto them by then. This is what a government takeover of health care looks like.

Some type of false flag ? A Target like mass hack attack - aimed not at a store but finance centers perhaps ?

It is a known fact that the FBI is the biggest source of domestic terrorism in America. Since there are no legitimate domestic terrorists for these clowns to catch, they are creating them instead. The reason they are engaging in such ridiculous behavior is because they have to justify their pointless and ridiculous jobs. It also serves as a great way to justify different political agendas and boost cable television ratings. For years they have been entrapping useful idiots and masterminding various terror plots. They’ve also been involved in the investigation of various staged hoaxes so the hoax itself can be covered up properly and the official narrative propagated to the masses. Perhaps even more insane is that many of these staged events appear to now be occurring roughly every six weeks. It is true that these events don’t always happen six weeks apart but usually the FBI doesn’t go much longer than two months before they are involved in another highly questionable event. After all, there are undoubtedly a number of logistical challenges that go along with staging these elaborate hoaxes so perhaps they can't always stick to the planned schedule. The guys over at the No Agenda podcast have been observing this phenomenon for quite some time now and it looks like they could be on to something.

Specifically let’s take a look at the latter part of 2013 since it has followed this pattern very closely.

So in recent history we have three highly suspicious events that appear to have all been staged or covered up by the FBI. These events have all happened roughly six weeks apart from one another. If this pattern continues we should expect another staged hoax with FBI involvement to occur sometime around the last week of January to the first week of February. It should be interesting to see if something happens within that general time frame. If it does we will keep reporting on this phenomenon until the douche bag terrorists at the FBI quit making this operation so obvious.﻿﻿

Has the National Security Administration (NSA) been changing the amounts held in the financial accounts of people it targets?

The question would seem absurd if it were not for a 308-page report on the NSA that was released on December 12 by an Official White House Panel. Recommendation 31, “Institutional Measures for Cyberspace,” on page 37 and repeated on page 221 reads:

(1) Governments should not use surveillance to steal industry secrets to advantage their domestic industry;

(2) Governments should not use their offensive cyber capabilities to change the amounts held in financial accounts or otherwise manipulate the financial systems.

Upon reading the panels' report, Trevor Timm (a surveillance expert from the Electronic Frontier Foundation) sent a tweet; it was retweeted by Glenn Greenwald, the journalist who originally leaked documents from Edward Snowden. The tweet read, “Does this NSA report recommendation imply that NSA is conducting offensive cyber attacks against financial systems?” Does it imply that the NSA is or has been altering the financial data of targeted individuals or agencies?

The NSA certainly has the ability to do so because it has the information to do so. The German news source Der Spiegel (September 15th, 2013) reported on an internal NSA branch known as “Follow the Money” (FTM). The branch monitors “international payments, banking and credit card transactions." In a responsive statement, the NSA admitted to tracking financial information but only as it related to terrorist financing and terror networks. It states, "This information is collected through regulatory, law enforcement, diplomatic, and intelligence channels, as well as through undertakings with cooperating foreign allies and partners."

One “cooperating” ally is apparently the international bank messaging system Society for Worldwide Interbank Financial Telecommunication or SWIFT. The system promotes itself as a financial service “with speed, certainty and confidence.” Over 10,000 banking organizations in 212 countries use SWIFT. In a carefully worded statement, SWIFT's chief information officer Mike Fish indicated that the agency had “no evidence to suggest” there had been “any unauthorized access.” The key word is, of course, “unauthorized.”

The NSA stores the financial information in a databank called Tracfin. (An identically-named database was created in France in 1990 with the stated goal of tracking illegal financial transactions; it is not clear if the database used by the NSA is somehow connected.) According to Der Spiegel, Tracfin “in 2011 contained 180 million records. Some 84 percent of the data is from credit card transactions.”

If the NSA is monitoring transactions in the Middle East and Germany, then how likely is it to be tracking money within US borders? This is especially likely given that leaked documents from Snowden indicate the NSA has been tracking the Visa credit card system. Visa offered a carefully worded response in which it claimed not to know of any “unauthorized” access to its database. As for other large US financial institutions, it would be surprising if they refused to share information with a government responsible for their economic dominance.

The only assurance of financial privacy is the NSA's claim that it is not monitoring American transactions. There are at least three reasons why the assurance is not credible.

1) The tracking of financial transactions within America has been documented for years. In 2008, the Wall Street Journal reported on “so-called 'black programs' whose existence is undisclosed.” Many of them “began years before the 9/11 attacks but have since been given greater reach. Among them, current and former intelligence officials say, is a longstanding Treasury Department program to collect individual financial data including wire transfers and credit-card transactions.” If one government agency has the data, then they all do.

2) In 2006, when NSA was discovered using SWIFT data, there was a political uproar in the EU; the U.S. agreed to safeguards and to limit its surveillance in exchange for access. Agreements from the NSA are apparently worthless as the back door access continues.

3) What the NSA says varies from moment to moment, person to person. For example, the agency has repeatedly denied that its surveillance is conducted to commercially benefit American companies. Nevertheless, Bloomberg (September 9th, 2013) reported on the NSA surveillance of Brazil’s state-controlled oil company, Petrobras. Documents released by Snowden included a 2012 NSA slide show presentation “that explained the agency’s capability to penetrate private networks of companies such as Petrobras....One slide in the presentation listed “economic” as an intention for spying.”

In his recent “open letter to the people of Brazil,” Snowden asked that government for political asylum. Of the NSA surveillance, he stated, “These programs were never about terrorism: they’re about economic spying, social control, and diplomatic manipulation. They’re about power.”

The foregoing is not surprising or even new, except for one detail. No government body has previously implied that the NSA might be now or in the future altering the information stored by financial institutions. No official has previously suggested that the NSA could bankrupt or lock up the finances of targeted individuals. It is a haunting question: Why would the panel explicitly tell the NSA, “Don’t do this!” if the agency weren't doing it already or planning to do so?

The panels' recommendations are heartening because they are overwhelmingly critical of the NSA ; the panel went so far as to unanimously call for splitting up the agency and for safeguards such as transparency. This is another surprise because the panel was hand-picked by Obama and included the die-hard loyalist Cass Sunstein and former CIA deputy director Michael J. Morell.

Obama quickly indicated his rejection of some of the panels' recommendations. Watching him deal with the rest of them will make for entertaining popcorn moments.

Meanwhile, everyone should make sure they have a print copy and a screen shot of their latest financial statements on hand. People should consider holding assets in a less conventional place than large and 'trusted' financial institutions. The advice sounds paranoid. But as paranoid as you get, it is difficult to keep up with the US government.

Wonder what "excitement "awaits the President upon his return to DC ? The first family should be back on January 6 , 2014 ......

Obama Departs for Sixteen Days in Hawaii

by KEITH KOFFLER on DECEMBER 20, 2013, 7:28 PM

The Obamas have left the building.

From the pool report:

Marine One touched down at 6:54 p.m. at Andrews Air Force Base. President Obama, Michelle Obama, daughters Malia and Sasha and first mother-in-law Marian Robinson soon emerged and quickly boarded Air Force One.

The president wore a dark suit but no tie, while Michelle Obama was casual in black pants and a jacket.

The Obamas — including First Dogs Bo and Sunny — are embarking on their annual holiday excursion to Hawaii. Our destination tonight is Honolulu.

At 7:03 p.m., we are rolling.

Sixteen days in Hawaii. Sixteen. Not including travel aboard the luxurious presidential aircraft. President Obama and his family will be there through January 5, the White House says. Imagine.

OH MY GOD PLEASE TAKE ME WITH YOU I’M SORRY FOR EVERYTHING I’VE WRITTEN I PROMISE TO BE GOOD I DON’T CARE IF IT COSTS TAXPAYERS $5 MILLION JUST TAKE ME ALONG I’LL DRINK MAI TAIS AND BE QUIET.

Keith, get a ahold of yourself. Gosh. You have plenty of nice things to do here in Washington and you can buy tropical drink mixes at the Safeway.

I mean, even if you are a person of means, I doubt you will be taking sixteen days in Hawaii this year. Because most of you who make a lot of money – don’t tell liberals, it will ruin their fun – work extremely hard and are paid so well because YOU ARE NEEDED AT YOUR JOB. In fact, you probably don’t use all your vacation days, because if you did, something would get screwed up.

But that would be news to a someone who has worked in the public sector and academia all his life.

Well, bon voyage. Hoping no volcanoes erupt while you’re there, either the real ones on the islands or the figurative ones presidents must deal with at any moment.